State capacity, innovation, and endogenous development in Chile

TL;DR

This paper examines Chile's industrial policy from 1990 to 2022, highlighting progress in innovation institutions but also persistent challenges like inequality and weak coordination, emphasizing the need for adaptive governance and ethical innovation.

Contribution

It provides a comprehensive analysis of Chile's evolving state capacity and innovation system using longitudinal data and integrates diverse economic and ethical perspectives.

Findings

Improved innovation institutions in Chile

Persistent regional inequality and weak coordination

Need for adaptive governance and ethical innovation

Abstract

The study explores the evolution of Chile's industrial policy from 1990 to 2022 through the lens of state capacity, innovation and endogenous development. In a global context where governments are reasserting their role as active agents of innovation, Chile presents a paradox. It is a stable and open economy that has expanded investment in science and technology but still struggles to transform this effort into sustainable capabilities. Drawing on the works of Mazzucato, Aghion, Howitt, Mokyr, Samuelson and Sampedro, the study integrates evolutionary economics, public policy and humanist ethics. Using a longitudinal case study approach and official data, it finds that Chile has improved its innovation institutions but continues to experience weak coordination, regional inequality and a fragile culture of knowledge. The research concludes that achieving inclusive innovation requires adaptive governance and an ethical vision of innovation as a public good.